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Interest rates for deposit accounts are rising at a record pace, making it more costly to settle for an average rate

Online accounts show a significant rate advantage -- several times the average for traditional, branch-based accounts

The biggest rate advantages were seen in savings accounts at 1.90 percent and 5-year CDs at 1.73 percent

Savings, money market accounts, and CD rates rising at record pace

Savings and money market rates just took the largest 1-year leap in the history of the MoneyRates.com America's Best Rates survey. As a result, both savings and money market account rates are now at the highest levels since the survey began in 2012.

This is great news for consumers, but some bank customers are benefiting much more quickly than others. The gap between the top savings account rate and the average rate in the survey also just reached an all-time high, meaning the cost of settling for an average rate is higher than ever. That's because while most banks are raising rates slowly, almost grudgingly, a handful of top banks have taken the initiative to raise rates at a faster clip.

The America's Best Rates survey identifies major trends in savings and money market rates across the banking industry by averaging rates over the previous quarter. Under analysis, the results yield valuable insights into the exceptions -- those banks that consistently offer the highest savings account rates and best money market rates. The study also helps expose risks and opportunities for consumers in different rate environments.

America's best savings account rates: 4th quarter, 2018

Based on average rates compiled throughout the recently completed calendar quarter, these ten banks had the best savings account rates:

America's best savings account rates: 4th quarter, 2018

Rank

Bank

2018 Q4 Avg APY

1st place

MySavingsDirect (ABR platinum medal winner)

2.32 %

2nd place

Salem Five Direct (ABR gold medal winner)

2.05 %

3rd place

Sallie Mae Bank (ABR silver medal winner)

2.02 %

4th place

Barclays (ABR bronze medal winner)

2.01 %

5th place (tie)

SFGI Direct

2.00 %

5th place (tie)

Synchrony Bank

2.00 %

7th place

Goldman Sachs Bank

2.00 %

8th place

American Express National Bank

1.96 %

9th place

Ally Bank

1.94 %

10th place

Discover Bank

1.94 %

(Note: Some rates that appear tied are actually separated by a small fraction of a percent.)

Average Savings Account Rate - 0.419 Percent

Overall, the average savings account rate throughout the last quarter was 0.419 percent, an increase of 0.145 percent over the past year.

That rise in the average savings account rate is nice, but not nearly as good as the strides being made by rates at the top of the chart. A year ago, the top rate in the survey was 1.45 percent. Now, not only is the top rate nearly 90 basis points higher, but there are seven savings accounts in the survey with rates of 2 percent or better.

Because the top rates are rising much faster than the overall average, it means that the cost of settling for an average rate is rising. The best savings account rate in the latest survey, an average of 2.32 percent offered by MySavingsDirect, is 1.9 percent higher than the overall average rate.

The Platinum medal for Best Savings Account Rate was awarded to MySavingsDirect for its consistently high average rate of 2.32 percent during the fourth quarter of 2018.

In terms of dollars and cents, this means that a customer with a $10,000 account could potentially earn $190 more in interest a year just by shopping for the best savings account rates rather than settling for average.

Average Online Savings Account Rate - 1.193 Percent

Besides the widening gap between the top rates and the overall average, another important savings account trend that continued over the past calendar quarter was the dominance of online accounts over traditional, branch-based accounts. The average online savings account offered a rate of 1.193 percent, compared to 0.101 percent for the average traditional savings account. This means the rate advantage for online banking compared to traditional banks has now surged to more than a full 1 percent.

America's best money market rates: 4th quarter, 2018

The following were the highest money market rates on average over the latest calendar quarter:

America's best money market rates: 4th quarter, 2018

Rank

Bank

2018 Q4 Avg APY

1st place

Sallie Mae Bank (ABR platinum medal winner)

2.13 %

2nd place

Capital One (ABR gold medal winner)

1.93 %

3rd place (tie)

ableBanking (ABR silver medal winner)

1.85 %

3rd place (tie)

CIT Bank (ABR silver medal winner)

1.85 %

5th place

BBVA Compass (ABR bronze medal winner)

1.80 %

6th place

First Internet Bank

1.79 %

7th place

Discover Bank

1.79 %

8th place

UFB Direct

1.60 %

9th place

Nationwide Bank

1.55 %

10th place

My Banking Direct

1.50 %

(Note: Some rates that appear tied are actually separated by a small fraction of a percent.)

Average Money Market Account Rate - 0.431 Percent

Money market account rates echo the same trends seen in savings accounts. At an average of 0.431 percent, money market rates overall are up by 0.180 percent over the past year, but the real action is at the top of the chart. The quarter's best money market rate of 2.13 percent, offered by Sallie Mae Bank, marks the first time the highest money market rate in the survey has topped 2.0 percent.

A year ago, the top money market rate was under 1.5 percent. Now a bank needs to offer 1.5 percent just to crack the top ten.

The Platinum medal for Best Money Market Account Rate was awarded to Sallie Mae Bank, who also ranked 3rd for Best Savings Account Rate during the fourth quarter of 2018.

Average Online Money Market Account Rate - 1.104 Percent

As with savings accounts, online rates for money market accounts offer a significant advantage over their traditional, branch-based counterparts. The average online money market rate is 1.104 percent, which is nearly six times as high as the average money market rate of 0.192 percent offered by traditional accounts.

New segment to the America's Best Rates survey

The America's Best Rates survey has always been good at identifying the specific banks that keep pushing the trend toward higher rates -- and now MoneyRates.com will be including 1-year and 5-year CD rate trends in the survey as well. Even though savings accounts, money market accounts and certificates of deposit are all deposit accounts, these financial products are very different. A CD, for example, requires that you commit your funds for a defined period of time, whereas, savings accounts and money market accounts are more liquid.

Especially when it comes to locking up your money for the term of a CD, you want to be certain you are getting a rate you can be happy with until the CD matures. The new segment of the America's Best Rates survey can help you identify CD interest rates that are well above the average of their peers. This means you can be ahead of the game from Day 1 of your CD term.

America's best CD rates: 4th quarter, 2018

MoneyRates.com averaged the 1-year and 5-year CD rates offered throughout the fourth quarter of 2018 to rank the rates offered by individual banks as well as to find the average rates offered in various categories. Besides identifying the banks offering the highest CD rates for 1-year and 5-year terms, the America's Best Rates survey also highlights key trends that can help you find the best interest rates.

Just like the savings accounts and money market accounts, there is a significant rate advantage that online CDs have over their traditional, branch-based counterparts. That rate advantage is especially attractive if you're looking for a longer term CD -- after all, if you're going to invest your money for five years, does it really matter if there's a branch of that bank nearby?

Another interesting trend to emerge from this survey of CD rates is that in some cases smart consumers who are shopping for a CD should think small -- as in small banks. The survey found that, on average, smaller banks offer higher CD rates than their large and medium-sized competitors.

The best 1-year CD rates heading into 2019

The following were the ten best 1-year CD rates on average throughout the most recent calendar quarter:

The best 1-year CD rates heading into 2019

Rank

Bank

2018 Q4 Avg APY

1st place

First Internet Bank (ABR platinum medal winner)

2.70 %

2nd place

Sallie Mae Bank (ABR gold medal winner)

2.68 %

3rd place

TIAA Direct (ABR silver medal winner)

2.67 %

4th place

Ally Bank (ABR bronze medal winner)

2.59 %

5th place

ableBanking

2.58 %

6th place

Barclays

2.58 %

7th place (tie)

Capital One

2.57 %

7th place (tie)

Goldman Sachs Bank

2.57 %

9th place

Discover Bank

2.57 %

10th place

Synchrony Bank

2.54 %

(Note: Some rates that appear tied are actually separated by a small fraction of a percent.)

Average 1-year CD Rate - 1.04 Percent

The average 1-year CD rate in the survey was 1.04 percent. As you can see by looking at the chart above, the top rate of 2.70 percent offered by First Internet Bank is at least 1.5 percent higher than the average, so it really does pay to shop for the best CD rates.

While most bank customers flock to the largest, most prominent banks, it is a good idea to give smaller institutions some thought when shopping for a CD. This survey found that, on average, small banks (defined as those with less than $5 billion in deposits) offered a 1-year CD rate of 1.37 percent. This compares favorably with the average 1-year CD rate of 0.98 percent offered by large banks (those with $15 billion or more in deposits) and the average of 0.84 percent offered by medium-sized banks.

The Platinum medal for Best 1-Year CD Rate was awarded to First Internet Bank, who also ranked 2nd for Best 5-Year CD Rate during the fourth quarter of 2018.

Average Online 1-year CD Rate - 1.78 Percent

As a group, online accounts had a clear edge over CDs available through traditional bank branches. The average 1-year rate for an online CD was 1.78 percent. This is just over a full percentage point higher than the average for branch-based CDs, which was 0.73 percent.

The best 5-year CD rates heading into 2019

The following were the ten best 5-year CD rates on average over the most recent calendar quarter:

The best 5-year CD rates heading into 2019

Rank

Bank

2018 Q4 Avg APY

1st place

BMO Harris Bank (ABR platinum medal winner)

3.44 %

2nd place

First Internet Bank (ABR gold medal winner)

3.32 %

3rd place

Beneficial Bank (ABR silver medal winner)

3.29 %

4th place

Raymond James Bank (ABR bronze medal winner)

3.24 %

5th place (tie)

Barclays

3.10 %

5th place (tie)

Goldman Sachs Bank

3.10 %

7th place

TIAA Direct

3.10 %

8th place

Synchrony Bank

3.07 %

9th place (tie)

Ally Bank

3.05 %

9th place (tie)

Capital One

3.05 %

(Note: Some rates that appear tied are actually separated by a small fraction of a percent.)

Average 5-year CD Rate - 1.71 Percent

The average 5-year CD rate offered in the most recent calendar quarter was 1.71 percent. As you can see in the chart above, though, you can choose from several banks offering at least 3 percent on a 5-year CD.

That kind of rate advantage is especially important for a long-term CD, because the rate you choose will affect you for years to come. For example, if you signed up for a $10,000 5-year CD at the average rate of 1.71 percent, you'd earn about $885 in interest by the time the CD matures. On the other hand, sign up for a $10,000 5-year CD at the highest rate of 3.44 percent offered by BMO Harris Bank, and you'd earn about $1,842 in interest over the next five years. That's a difference of about $957, which is certainly worth the effort of not settling for average.

The Platinum medal for Best 5-Year CD Rate was awarded to BMO Harris Bank for its whopping 3.44 percent average rate over the entire fourth quarter of 2018.

Another trend that carried over from 1-year CDs to 5-year CDs was the opportunity to earn a better rate by looking at smaller banks. Small banks in the survey offered an average 5-year CD rate of 2.01 percent, compared to 1.58 percent for large banks and 1.65 percent for medium-sized banks.

Average Online 5-year CD Rate - 2.28 Percent

As was the case with 1-year CDs, online 5-year CDs generally offered an advantage over branch-based CDs. The average 5-year online CD offered a rate of 2.28 percent, compared to 1.49 percent offered by the average branch-based 5-year CD.

Rather than base the America's Best Rates savings, money market account, and now CD account rankings on a single snapshot in time, MoneyRates looks to identify the most consistently competitive accounts by averaging rates throughout each calendar quarter. Rates available to customers with a $10,000 balance and no broader relationship with the bank are used for this survey.

Further, to provide a representative view of banking trends, the analysis is based on the MoneyRates Index, a consistent sample of accounts reflecting a cross-section of the retail deposit industry. The MoneyRates Index is comprised of 50 of the largest retail deposit institutions in the United States, plus 25 smaller banks and 25 medium-sized banks.

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Archive of America's Best Rates Surveys

Best rates for savings & deposits in the U.S. – 3rd quarter, 2018 (+)

America's best savings account rates: 3rd quarter, 2018

Rising rates are good; but if you really want to benefit from them, you should look for one of the top-performing banks. All the banks on the top-ten list below, for example, exceed the average savings account rate by better than 1.3 percent.

Not only do these banks have a healthy lead, but they are pulling away from the pack. While the average savings account rate rose by 3.2 basis points during the most recent quarter, the top-ten banks generally upped their rates by around 20 basis points.

Based on average rates compiled throughout the recently completed calendar quarter, these ten banks had the best savings account rates:

Rank

Bank

2018 Q3 Avg. Savings Account Rate

1

Salem Five Direct (ABR platinum medal winner)

2.05 percent

2

Goldman Sachs Bank (ABR gold medal winner)

1.83 percent

3

SFGI Bank (ABR silver medal winner)

1.83 percent

4

Synchrony Bank (ABR bronze medal winner)

1.82 percent

5

Barclays

1.82 percent

6

FNBO Direct

1.81 percent

7

Ally Bank

1.79 percent

8

American Express National Bank

1.77 percent

9

Discover Bank

1.76 percent

10

Sallie Mae Bank

1.75 percent

Average savings account rate - 0.377 percent

The average savings account rate rose by 3.2 basis points during the third quarter to reach 0.377 percent. That marks a new high for the MoneyRates Index in more than six years of history, and the average rate increase of nearly 12 basis points over the past year marked the highest 12-month rate increase yet.

Average online savings account rate - 1.069 percent

Rates are flourishing among online savings accounts in particular, where the average rate crossed above the 1 percent mark for the first time. The average online savings account rate is now 1.069 percent, nearly a full percentage point higher than the average rate of 0.096 percent for traditional savings accounts.

The rate advantage offered by online savings accounts is evident in the top-ten list above, where all of the top-ten rates are offered by online accounts. Salem Five Direct's online savings account became the first in this survey's history to cross above the 2 percent barrier.

America's best money market rates: 3rd quarter, 2018

As is the case with savings accounts, while rates are gradually rising on average, a handful of banks have charged out ahead. These banks are not only offering rates much higher than the category average, but they are building on this advantage by increasing rates more quickly than most of their competitors.

The following were the highest money market rates over the latest calendar quarter:

Rank

Bank

2018 Q3 Avg. Money Market Account Rate

1

Sallie Mae Bank (ABR platinum medal winner)

1.90 percent

2

CIT Bank (ABR gold medal winner)

1.85 percent

3

Able Banking (ABR silver medal winner)

1.82 percent

4

Capital One (ABR bronze medal winner)

1.77 percent

5

BBVA Compass

1.70 percent

6

Discover Bank

1.61 percent

7

UFB Direct

1.60 percent

8

Nationwide Bank

1.55 percent

9

First Internet Bank

1.43 percent

10

TIAA Direct

1.15 percent

Average money market account rate - 0.381 percent

On average, money market rates have risen even faster than savings account rates over the past year and have now moved slightly ahead, 0.381 percent compared with 0.377 percent. Both the level of money market rates and the pace of increase over the past year are the highest in the history of this survey.

Average online money market account rate - 1.029 percent

Here again, the advantage of online accounts is evident. Nine of the top ten money market rates are offered by online accounts. The average online money market rate topped 1 percent for the first time in the third quarter, at 1.029 percent. That puts it well ahead of the average rate of 0.166 percent offered by traditional money market accounts.

Our method -- identify consistently competitive banks

The America's Best Rates survey is based on a sample of 100 banks designed to represent all aspects of the retail deposit market, with 50 large banks, 25 medium-sized banks and 25 small banks. Rates listed are based on the average rate each institution offered during the quarter rather than on just one snapshot in time. This helps us identify banks that consistently compete for your business, giving an advantage to savers that are willing to move their deposits to stay ahead of inflation.

In addition to identifying the specific banks that keep pushing the trend toward higher rates, the third quarter America's Best Rates survey also punctuates how critical your choice of bank can be.

While rates are starting to change quickly, the names on these top-ten lists have been pretty consistent from year to year. That's good news for their customers -- they don't have to change banks constantly to catch the wave of rising rates. To do that, you simply have to be with one of these banks that is at the leading edge of the rising-rate trend.

Best rates for savings & deposits in the U.S. – 2nd quarter, 2018 (+)

America's best savings account rates: 2nd quarter, 2018

The average savings account rate was 0.345 percent during the second quarter, up from 0.305 percent in the first quarter. Some accounts are doing much better than that, though. MoneyRates found several that offered savings account rates that were over a full percentage point higher.

The following were the ten highest savings account rates during the quarter:

Rank

Bank

Savings Account Rate

1

Salem Five Direct (ABR platinum medal winner)

1.85 percent

2

SFGI Direct (ABR gold medal winner)

1.66 percent

3

Goldman Sachs Bank (ABR silver medal winner)

1.65 percent

4

Synchrony Bank (ABR bronze medal winner)

1.64 percent

5

FNBO Direct Bank

1.63 percent

6

American Express National Bank

1.59 percent

7

Sallie Mae Bank

1.58 percent

8

Barclays

1.57 percent

9

Discover Bank

1.55 percent

10

CIT Bank

1.55 percent

Not only are these highest rates well above average; but, for the most part, they are increasing their advantage by raising rates more quickly than the overall category average. MoneyRates found that nine of the top-ten rates listed above had a higher than average increase during the second quarter.

This reflects a lively competition among some banks to offer the best interest rates, and the real winners from that competition are the customers who are earning higher rates from those banks.

Higher rates are especially prevalent among online savings accounts. The average online savings account rate was 0.987 percent during the second quarter compared to an average rate of just 0.085 for traditional, branch-based accounts. All of the top ten savings account interest rates were for online accounts.

America's best money market rates: 2nd quarter, 2018

The average money market rate during the second quarter was 0.342 percent, up from 0.305 in the first quarter. Once again, though, MoneyRates.com found several banks doing considerably better than average.

Here are the ten highest money market rates in the survey:

Rank

Bank

Money Market Account Rate

1

CIT Bank (ABR platinum medal winner)

1.79 percent

2

Able Banking (ABR gold medal winner)

1.70 percent

3

Sallie Mae Bank (ABR silver medal winner)

1.68 percent

4

UFB Direct (ABR bronze medal winner)

1.60 percent

5

Capital One

1.57 percent

6

Nationwide Bank

1.55 percent

7

BBVA Compass

1.53 percent

8

Discover Bank

1.40 percent

9

First Internet Bank

1.27 percent

10

TIAA Direct

1.09 percent

As with savings accounts, these top banks are growing their advantage by raising money market rates more quickly than the the category as a whole. All top ten money market accounts had an above-average rate increase during the quarter.

Money market accounts also mirrored the trend among savings accounts when it came to the superiority of online accounts. The average online money market account rate was 0.955 percent compared with 0.137 percent for traditional, branch-based accounts. Nine of the ten highest money market rates was offered by an online account.

Our method -- identify consistently competitive banks

The America's Best Rates survey is based on a sample of 100 banks designed to represent all aspects of the retail deposit market, with 50 large banks, 25 medium-sized banks and 25 small banks. Rates listed are based on the average rate each institution offered during the quarter rather than on just one snapshot in time. This helps us identify banks that consistently compete for your business, giving an advantage to savers that are willing to move their deposits to stay ahead of inflation.

In addition to identifying the specific banks that keep pushing the trend toward higher rates, the second quarter America's Best Rates survey also punctuates how critical your choice of bank can be. With the disparity growing between banks that reward consumers with the highest rates and those that don't, inertia on the part of consumers may cost them in the long run.

Best rates for savings & deposits in the U.S. – 1st quarter, 2018 (+)

The best savings account rates - 1st quarter, 2018

The following were the ten best savings account rates in the first quarter of 2018:

Bank

Savings account rate

1st place

Salem Five Direct (ABR platinum medal winner)

1.58 percent

2nd place

CIT Bank (ABR gold medal winner)

1.54 percent

3rd place

Synchrony Bank (ABR silver medal winner)

1.49 percent

4th place (tie)

Goldman Sachs Bank USA (ABR bronze medal winner)

1.48 percent

4th place (tie)

FNBO Direct Bank (ABR bronze medal winner)

1.48 percent

6th place (tie)

Barclays Bank

1.46 percent

6th place (tie)

SFGI Direct

1.46 percent

8th place

American Express National Bank

1.42 percent

9th place

Discover Bank

1.40 percent

10th place

Ally Bank

1.38 percent

The best money market rates - 1st quarter, 2018

The following were the ten best money market rates in the first quarter of 2018:

Bank

Money market account rate

1st place

CIT Bank (ABR platinum medal winner)

1.75 percent

2nd place

Able Banking (ABR gold medal winner)

1.62 percent

3rd place

UFB Direct (ABR silver medal winner)

1.54 percent

4th place

Nationwide Bank (ABR bronze medal winner)

1.49 percent

5th place

Sallie Mae Bank

1.47 percent

6th place

Capital One

1.43 percent

7th place

BBVA Compass

1.30 percent

8th place

Discover Bank

1.27 percent

9th place

First Internet Bank

1.15 percent

10th place

Bank of Internet

1.05 percent

Best rates for savings & deposits in the U.S. – 4th quarter, 2017 (+)

The best savings account rates - 4th quarter, 2017

Savings account rates increased by 1.6 basis points during the fourth quarter of 2017, to an overall average of 0.274 percent. The following were the ten best savings account rates during the quarter:

Bank

Savings account rate

1st place

Salem Five Direct (ABR platinum medal winner)

1.45 percent

2nd place

CIT Bank (ABR gold medal winner)

1.34 percent

3rd place

SFGI Direct (ABR silver medal winner)

1.32 percent

4th place (tie)

Nationwide Direct (ABR bronze medal winner)

1.30 percent

4th place (tie)

Synchrony Bank (ABR bronze medal winner)

1.30 percent

6th place

Barclays Bank

1.29 percent

7th place

GS Bank

1.28 percent

8th place

American Express National Bank

1.26 percent

9th place

Ally Bank

1.23 percent

10th place

Radius Bank

1.22 percent

The best money market rates - 4th quarter, 2017

Money market account rates increased by 3.2 basis points during the fourth quarter, to an average of 0.251 percent. The following were the top ten best money market rates during the quarter:

Bank

Money market account rate

1st place

UFB Direct (ABR platinum medal winner)

1.41 percent

2nd place

Sallie Mae Bank (ABR gold medal winner)

1.30 percent

3rd place

Able Banking (ABR silver medal winner)

1.30 percent

4th place

Capital One (ABR bronze medal winner)

1.27 percent

5th place

BBVA Compass

1.25 percent

6th place

Discover Bank

1.07 percent

7th place

First Internet Bank

0.97 percent

8th place

EverBank

0.96 percent

9th place

TIAA Direct

0.95 percent

10th place

Ally Bank

0.90 percent

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Advertiser Disclosure:
Many of the savings offers appearing on this site are from advertisers from which
this website receives compensation for being listed here. This compensation may impact
how and where products appear on this site (including, for example, the order in which
they appear). These offers do not represent all deposit accounts available.

Editorial Disclosure:
This content is not provided or commissioned by the bank advertiser. Opinions expressed here
are author's alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise
endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate
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